A group of Indian startup founders wrote to Prime Minister Narendra Modi, Finance minister Nirmala Sitharaman and the Reserve Bank of India on the recent sanctions against Paytm, urging them to engage in constructive dialogue with the Fintech ecosystem, Moneycontrol reported.

Paytm Crisis: A QR code for the Paytm digital payment system at a store in Mumbai, India.(Bloomberg)

Who are the signatories of the letter?

The letter has been signed by at least a dozen founders, it added. These include- Murugavel Janakiraman of Bharat Matrimony, Deepak Shenoy of CapitalMind, Ritesh Malik of Innov8, Vishal Gondal of GOQii, Yashish Dahiya of PB Fintech and Rajesh Magow of MakeMyTrip- as per the report.

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What does the letter say about RBI amid Paytm crisis?

As per the report, the letter read, “RBI’s current, seemingly punitive, regulations levied against Paytm Payments Bank could have far-reaching and detrimental consequences for the entire FinTech ecosystem. The recent directives also impact millions of users of Paytm Payments Bank and such harshness needs to be revaluated to safeguard the best interests of customers and merchants.”

The letter also claimed that the sanctions against Paytm Payments Bank can impact the country’s image as a business-friendly nation as “excessively stringent regulations targeting prominent fintech innovators like Paytm Payments Bank could create an impression of inconsistency and unpredictability, potentially deterring potential investors and innovators from entering the Indian market.”

The founders also pushed for a review of RBI’s regulatory directions as “reassessing the proportionality of restrictions considering their potential impact on Paytm Payments Bank, the Fintech ecosystem, and the broader economy. Provision of a reasonable timeframe for rectification: Granting Paytm Payments Bank a clear and practical window to address identified deficiencies and demonstrate compliance.”

What Paytm CEO Vijay Shekhar Sharma said?

This comes as the Reserve Bank of India launched a major clampdown on Paytm Payments Bank citing regulatory standards and compliance requirements.

Meanwhile, Paytm founder Vijay Shekhar Sharma assured that there will be no layoffs.

“We are not completely sure of things…like what exactly went wrong. But we will figure out everything soon. We will reach out to the RBI to see what can be done,” the founder told employees.

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